Telecom operator Bharti Airtel has plans to invest Rs 27,000-28,000 crore in telecom network with a focus on 5G rollout, a company official said on Wednesday.
While the company is planning to increase capital expenditure 10-15 per cent, it has no plans to charge a premium rate for 5G services as it has not worked in several countries that tried to do so.
“Airtel capex will be in line with that spent in the last three years. It may go up and down because of the faster rollout of 5G — around Rs 27,000-28,000 crore. We may see an upsurge in one year and gradually moderate around the same level,” the official, who did not wish to be named, said.
The company earlier had an annual average capex in the range of Rs 24,000-25,000 crore. The official said that capex is being largely spent on radios (mobile antennas), fibre, broadband and enterprise technology data centres.
According to data shared by the telecom ministry, Bharti Airtel has rolled out 3,293 base stations for 5G till November 26.
The official said that the company hopes mobile services rates to go up but the range of increase will depend on market dynamics.
Bharti Airtel has increased the price of its minimum recharge for 28 days mobile phone service plan by about 57 per cent to Rs 155 in Haryana and Odisha. The company has stopped its minimum recharge plan of Rs 99, under which it offered 200 megabytes of data and calls at the rate of Rs 2.5 paise per second.
In Haryana and Odisha, Airtel has started offering the Rs 155 plan with unlimited calling, 1GB data and 300 SMSes. The officer said that the response of the pilot run of the new tariff has been good and churn has been much lower than expected.
He said that in the next six weeks the company will have a full idea of the pilot and take calls on its rollout in other telecom circles. When asked whether Airtel will look at charging a premium for 5G services, the official said that the premium price for 5G has not worked anywhere in the world and the company is also not interested in charging higher for the 5G services.
He said that the company sees a lot of business coming from consumers shifting from 2G to 4G, pre-paid to postpaid and postpaid customers buying all of Airtel’s services such as broadband and direct-to-home.
The average revenue per user or ARPU (a key metric for telcos) stood at Rs 190 for the July-September 2022 quarter compared with Rs 153 in the same period a year ago.
Bharti Airtel is also looking at increasing revenue from new business verticals around cloud services, cyber security, communications platform-asa-service, which it estimates to be a potential Rs 50,000-crore market.